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Mar 31, 2022
Honest Co Q1 2022 Earnings Report
Reported results in line with outlook.
Key Takeaways
The Honest Company reported a 15% decrease in revenue to $69 million for Q1 2022, compared to Q1 2021, and a net loss of $15 million, compared to a net loss of $4 million in the same period last year. The company maintains its full-year 2022 outlook and expects to return to growth over the next three quarters. They ended the quarter with $78 million in cash, cash equivalents and short-term investments.
Revenue decreased 15% to $69 million compared to the first quarter of 2021.
Gross margin was 30.0% compared to 35.0% in the first quarter of 2021.
Net loss was $15 million compared to net loss of $4 million during the first quarter of 2021.
The company ended March 31, 2022 with $78 million in cash, cash equivalents and short-term investments.
Honest Co
Honest Co
Forward Guidance
The company's full year 2022 revenue outlook remains unchanged and is expected to be approximately flat compared to 2021. Full year 2022 Adjusted EBITDA outlook remains unchanged and is expected to be a loss in the range of negative $5 million to negative $10 million.
Positive Outlook
- Revenue outlook reflects mid-single digit growth over the remaining three quarters of the year compared to 2021
- Benefit of price increases is anticipated to phase in over the course of the year
- Growth in core product categories is expected to be mid- to high-single digits for the remainder of 2022
- Gross margin is expected to improve progressively over the course of the year due to the roll-out of mid-single digit price increases
- More favorable assumptions for selling, general and administrative expense are also expected to offset rising costs
Challenges Ahead
- Household and Wellness product category is expected to face continued headwinds due to reduced consumer demand for sanitizing and disinfecting products
- Company continues to face a volatile input cost environment
- Full year 2022 gross margin is expected to be flat to slightly down compared to full year 2021
- Adjusted EBITDA improvement is anticipated to be weighted towards the second half of the year, reflecting heightened inflationary pressures in the first half of the year
- Company plans to continue supporting the long-term growth of the business with additional investments in research and development and digital technology